Entering into a mutual wills agreement

1 By entering into the agreement to make mutual wills each party covenants that:

during the lifetime of the other, he or she will not alter or revoke the will made by him or her without the consent of that other; and

after the death of one the other will not alter or revoke his or her will.

A common arrangement where mutual wills are useful is where a husband and wife marry, and where each has children of an earlier marriage. The couple may agree that whoever survives the other is to inherit the estate of the other; but upon the death of the surviving spouse his or her entire estate is to be divided (eg.) equally amongst all of the children of both of them.

2. If whilst one party is alive the other alters his or her will without obtaining the consent of the former, then this will be a breach of the agreement. If A alters his will and (for example) leaves the whole of his estate to his own children, then if B learns of this she can make a new will herself (for example leaving the whole of her estate to her own children), because the breach by A discharges her from having to comply further with the agreement.

3. If B finds out that A has altered his will only after A has died, then the position is the same: B will not inherit A’s estate (or whatever it was agreed that B should inherit), and B will proceed to make a new will.

4. There is a theoretical liability for damages for breach of contract: B can sue A, or A’s estate, for damages. But this is unlikely to be a useful exercise. Essentially, the result of one party breaking the agreement during the life of the other is to negate the agreement, and to leave the other party free to make his or her new will.

5. But once one party has died, leaving the agreed mutual will as his or her last will, then the situation is significantly different.

6. When A dies leaving the agreed mutual will to operate, then B will inherit from A’s estate. Once this happens, so far as the law can do this it endeavours to ensure that the agreement can no longer be broken (as was possible during the life of both, and before one had actually inherited from the other) by B making a new will.

7. If B does make a new will and departs from the agreement, then the courts will impose a constructive trust over the assets that B inherited, and require that they be held on a trust to give effect to the mutual wills agreement. For example, this might occur by the courts requiring B to hold the property she inherits from A on trust for herself for life, and after her death on trust for all of the children of A and B in equal shares (if that was the effect of the mutual wills agreement)

8. The limitation of a mutual wills arrangement is that when one party, in this example A, has died and B has inherited A’s estate; although in effect B will not be able to make a new will which actually operates to give away her estate other than according to the pattern of the agreed mutual wills, it is difficult to prevent B from “white anting” the agreement by giving away assets during her remaining lifetime.